Posco Plant In India Gets Environmental Clearance

Nirmala George, Associated Press

NEW DELHI (AP)-- India's environment ministry has cleared South Korean steel giant Posco's planned $13 billion steel plant in eastern India but has asked the company to spend more on social welfare, an official said Friday.

The clearance was given a few days ago and will allow Posco to go ahead with the massive plant in Odisha state, the official said on condition of anonymity because he was not authorized to speak to the media. He did not give further details.

The clearance comes days before South Korean President Park Geun-hye is to begin a four-day visit to India on Jan. 15.

The Odisha steel plant would be the largest-ever foreign investment in India. The country has been embroiled in fierce debates over how to protect its environment while lifting hundreds of millions of people out of poverty through investment and infrastructure development.

Posco spokesman Jeong Yong-min in Seoul said the Indian government has asked the company to spend 5 percent of its $12.6 billion investment in Odisha on social commitments.

But Jeong said no agreement has been reached on how much the company would spend on its social projects.

The project is expected to produce 13.2 million tons (12 million metric tons) of steel per year. It has been delayed for years following protests about environmental damage and land procurement.

The Odisha project requires about 4,000 acres (1,620 hectares) of land for the steel mill as well as an affiliated power plant, railway line, road, water supply infrastructure and port.

An Indian environmental panel in 2012 suspended clearances for the plant, saying permissions granted earlier were based only on environmental information about the first phase of the project and not the entire project.

In October, a U.N. panel of experts urged POSCO to suspend plans for the Odisha steel plant over concerns that it threatened the rights and livelihoods of tens of thousands of people.

Earlier, a New York-based rights group said land seizures threatened to displace 22,000 people and deprive thousands more of their means of existence in Odisha.

Posco denied that anyone had been forcibly evicted from private land. The company said the government was clearing only encroached land and giving due compensation for removing crops and aquaculture ponds. It said 90 percent of the project area was government owned.

Last year, Posco pulled out of a proposed $5.3 billion steel plant in the southern Indian state of Karnataka, dealing a blow to government efforts to attract foreign investment. The company said it scrapped the project because of inordinate delays stemming from local opposition to land acquisition for the project.